Denso Corporation has boosted its full-year earnings forecast 16% thanks to the success of No. 1 customer Toyota Motor, which passed Ford to become the world's second biggest car maker in 2003 and has forecast record sales of over seven million units in 2004.

According to Reuters, Denso, 23.4% owned by its leading customer, has been expanding sales of high-margin car air conditioners and diesel fuel injection systems to US carmakers, including General Motors.

The news agency noted that Denso fortunes contrast sharply with those of the major US parts makers like Delphi and Visteon with their heavily unionised workforces and under-funded pension plans.

Denso makes just under half its sales to Toyota and lifted its net profit estimate for the year ending in March to 102 billion yen ($US967 million) on record revenues of 2.52 trillion yen.

Reuters said the new forecast is still lower than last year's profit of 111.02 billion yen, which was inflated by extraordinary gains related to Denso's pension fund, but analysts said Denso had left room to expand.

"This is a company famous for its conservative forecasts, and I'd be surprised if Denso failed to beat even its upgraded target," Daiwa Institute of Research analyst Eiji Hakomori told the news agency, adding: "Denso has fatter profit margins than the other biggest players in the auto parts industry and they're well positioned in key growth areas."

Reuters noted that Denso, the world's third-biggest parts maker by sales, notched up a group net profit of 90.86 billion yen for the first nine months of the 2003/04 business year, putting it 89% of the way towards its revised target for the full year.